Mariner in surprise move to conquer the Globe

By Eli Greenblat

CORPORATE investment group Mariner has taken quick advantage of the boardroom turmoil at struggling youth fashion retailer Globe to make a $19.7 million all-scrip takeover bid for the retailer.

The unsolicited takeover approach came as a surprise to Globe, which owns a portfolio of footwear and apparel brands, with the company on Friday advising shareholders to take no action over the proposed offer from Mariner of five fully paid Mariner shares for every four fully paid Globe ordinary shares.

The success or failure of the takeover bid will rest heavily on the shoulders of Globe co-founder and chief executive Matthew Hill and his brothers Peter and Stephen, who together hold a 67.8 per cent stake in the company.

Playing smaller roles in the impending takeover battle will be rag-trade billionaire Solomon Lew who owns 5.9 per cent of Globe and Melbourne-based merchant bank Kidder Williams, which holds a 2.3 per cent stake and is run by businessman David Williams.

On Friday morning Mariner told the Australian Securities Exchange it had made an offer to the Globe board, offering 47.5¢ per share for each Globe share, totalling $19.7 million for the company's 41.463 million shares.

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However, the offer is not a cash bid. Mariner will offer five fully paid Mariner shares for every four fully paid Globe ordinary shares. Mariner said its offer represented a 21.8 per cent premium to the Globe closing price of 39¢ on November 15.

The bid comes as the Globe board is mired in confusion after a second strike against the adoption of its remuneration report at its annual meeting last week triggered a spill motion of the complete board, which was also passed.

It is expected current Globe directors, including the Hill brothers, will regain their seats at an upcoming special shareholders meeting.

The second strike - only the second publicly listed company to receive such a snub from shareholders - reflects investor anger at Globe's performance. Net profit fell to only $62,000 last financial year, down 95 per cent from $1.09 million the previous year. Revenue was down slightly to $83 million.

Mariner said it was making the offer because Globe had performed poorly for many years and it believed there was appetite among Globe shareholders for a change.

It said by converting their stock to Mariner shares Globe investors had the opportunity to become part of a growing and successful Australian investment company.

''Mariner's objective is to become a substantial shareholder of Globe, seek board representation and implement strategies to bridge the gap between Globe's NTA and Globe's current share price,'' it said.

Globe's NTA was $26.5 million at June 30 against a market capitalisation of $16.6 million.

''Mariner has a proven track record,'' the company said. ''We create value for Mariner shareholders by driving change in the companies in which we invest. Investors who want to unlock value for their Globe shareholding should become Mariner shareholders.''